It will be clear, I think, now, in 1911, that this latter proposal is not worth revival. No substantial amendment of the Act should properly be made without the formal consent of the Irish Legislature, representing Irish public opinion, and the prior consultation with the Irish Cabinet which such consent would imply. If the lamentable necessity ever arose of amending the Act against the wishes of Ireland, the sudden invasion of Westminster by a body of angry Irish Members, too small to affect the result (for otherwise the attempt to amend would not be made) and large enough to revive the old political dislocation and passion, would not simplify the process of amendment or be of value to anybody concerned. The proposal was probably only suggested by a vague leaning towards the Federal principle, which, in the present case, we should certainly reject. It serves indeed as one more illustration of the anomalies which might result from the inclusion of Irish Members at Westminster. No more unhealthy position could be imagined than one which would render it possible for an amendment of the Home Rule Act, whether in the direction of greater latitude or of stricter limitation, to depend solely upon the Irish vote in an Assembly predominately non-Irish. That is not to the discredit of Ireland. The system would be just as indefensible, whatever the subordinate State concerned. It would be Federalism run mad, and would make Alexander Hamilton turn in his grave. It is worth while to note that, even under a sane and normal Federal system, the Irish Constitution would be less easily alterable in either direction than under the plan of treating her as a self-governing Colony. In the latter case action is direct and simple, while most Federal Constitutions are extraordinarily difficult to amend. The Dominion of Canada is only an apparent exception.
I turn lastly to Finance, the point which most closely affects representation at Westminster, and which distinguishes any form of quasi-Federal Home Rule most sharply from its alternative, "Colonial" Home Rule.
All Federal systems necessarily involve a certain amount of joint finance between the superior and the inferior Government. The distribution of financial powers varies widely in different Federations, but all have this feature in common—that the central or superior Government controls Customs and Excise, and is to a large degree financed by means of the revenue derived from those sources. The United States Government, as distinguished from that of the individual States, pays in this way for almost its entire expenditure.[94] So does the Dominion of Canada;[95] while in the Australian Commonwealth the receipts from Customs and Excise alone more than cover the whole Commonwealth expenditure.[96]
Finance makes or mars Federations. Some Federations or organic Unions of independent States have come into being through a strong desire in the separate States to have, among other things, a common system of Customs, and in the case of the German Empire and the South African Union a Customs Union or Zollverein has preceded Federation. These phenomena are the most marked illustration of the general truth that a common desire to federate, or unite, on the part of individual States is a condition precedent to a sound Federation or Union. On the other hand, finance, especially the question of joint Customs, has sometimes presented obstacles to a Federation which, on other grounds, was earnestly desired. The long delay in achieving the Australian Federation was largely due to the desire of New South Wales to maintain her Free Trade system, while the financial arrangements generally caused most of the practical difficulties met with in arranging the Federation both of Canada and Australia, and in their subsequent domestic relations. Nova Scotia in the former case, and Western Australia in the latter, held out to the last instant, and the former subsequently had to receive exceptionally favourable treatment. In both Federations some measure of friction is chronic, and in neither has a perfectly satisfactory system been evolved. The Union of Ireland and Great Britain in 1800 was in this respect, as in all others, a flagrant departure from sound principle. The Customs Union which followed it was a forced Customs Union, and, together with the other financial arrangements between the two countries, has produced results incredibly absurd and mischievous. Some of these results I briefly indicated in Chapter V. In the following chapters I shall tell the whole story fully, and I hope to convince the reader that we should follow, not only historically, but morally and practically, the correct line of action if, in dissolving the Legislative Union, we dissolve the Customs Union also. That would involve a virtually independent system of finance for Ireland, and place her fiscally in the position of a self-governing Colony. If and when a real Federation of the United Kingdom becomes practical politics, she would then have the choice of entering it in the spirit and on the terms invariably associated with all true Federations or Unions. That is, she would voluntarily relinquish, in her own interest, financial and other rights to a central Government solely concerned with central affairs.
I need scarcely point out in this connection the vital importance of the question of representation at Westminster. Ireland resembles the self-governing Colonies, and differs from Great Britain, in that the greater part of the revenue raised from her inhabitants is derived from Customs and Excise—that is, from the indirect taxation of commodities of common use. If she is denied control of these sources of revenue under the coming Bill, it will be absolutely necessary, in spite of all the concomitant difficulties, to give her a representation at Westminster which is as effective as it can be made. But let it be realized that we could not make her control over her own finance as effective as that exercised by a small State within a Federation, because such a State, however small, has equal, or at any rate disproportionately large, representation in the Federal Upper Chamber, and Federal Upper Chambers can reject Money Bills. The Upper Chamber in Ireland's case would be the House of Lords, where she could scarcely be given effective representation, and which, in any case, cannot reject Money Bills.
Let us now examine Ireland's claim for fiscal autonomy.
CHAPTER XI
UNION FINANCE
I ask the reader to follow with particular care the following historical summary of Anglo-Irish finance. None of it is irrelevant, I venture to say. It is not possible to construct a financial scheme, or to criticize it when framed, without a fairly accurate knowledge of the historical facts.